As per Section 234E where a person fails to deliver or cause to be delivered a statement within the time prescribed in sub-section (3) of section 200 or the proviso to sub-section (3) of section 206C, he shall be liable to pay, by way of fee, a sum of two hundred rupees for every day during which the failure continues.

Currently when the TDS/TCS return gets delayed it is a usual practice that the return is filed after the due date with tin facilitation centre without depositing the fees u/s. 234E. The same is being accepted by TIN centre as the utility has not been upgraded for collection of fees prior to acceptance of delayed TDS/TCS Return. However certain important observation in regard to same is brought to notice of members: - 1). "ITNS-281 has been amended for collection of fees U/s.234E & is attached herewith." 2). Without prejudice to the provisions of the Act, a person shall be liable to pay penalty u/s.271H, if, he fails to deliver or cause to be delivered a statement within the time prescribed in sub-section (3) of section 200 or the proviso to sub-section (3) of section 206C; Penalty prescribed U/s.271H(2) shall not be less than ten thousand rupees but which may extend to one lakh rupees. However as per section 271H(3) no penalty shall be levied for failure to deliver TDS/TCS Statement if the person proves that after paying tax deducted or collected along with the fee and interest, if any, to the credit of the Central Government, he had delivered or cause to be delivered the statement referred to in sub-section (3) of section 200 or the proviso to sub-section (3) of section 206Cbefore the expiry of a period of one year from the time prescribed for delivering or causing to be delivered such statement. 3). What we can make out after discussion with TIN-Facilitation Centre & going through the text of above sections is that though TDS utility has not been upgraded but still we should file the delayed TDS/TCS returns after depositing fees u/s.234E & interest so that the penalty provisions of section 271H could be avoided in future. The challan deposited for fees U/s.234E can also be included in the TDS return by way of payment others till the time utility is not upgraded.

Section 234E of the Income Tax Act- Legality and Validity challenged in the High Court of Kerala
The legality and validity of section 234 E of the Income Tax Act, 1961 inserted by the Finance Act, 2012 making a person liable to pay, by way of fee, a sum of Rs 200/-for each day's delay in filing the statement of Tax Deducted at Source (TDS) or Tax Collected at Source (TCS) is challenged in the High Court of Kerala. The levy in the nature of 'fee' has been challenged as illegal, arbitrary, unreasonable, invalid and unconstitutional, in a writ petition filed by a Lower Primary School in Kannur.
The Honourable High Court has admitted the writ petition and has stayed all the proceedings initiated against the petitioner under section 234E of the Income Tax Act for a period of two months. The standing counsel for the Income Tax department has taken notice for all the respondents in the writ petition.

arunrajs@justice.com

Reply

CA.SARAVNAN

1/30/2014 06:16:21 pm

This interest is penalising deductors. Why income tax department has not made any software for mentioning names, PAN and amount for deductees at the time of TDS payment itself. Why it makes it as two separate works.
Also Income tax department is not paying any daily interest or penalty even if refund is made after many years from the date of filing returns.

Reply

ca dileep kumar tm

12/23/2013 03:52:38 pm

could you please enligthen about the case law relating to the writ filed beflore the high court of kerala like name of thee petetioner etc.

regards

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NAVEEN KUMAR

1/5/2014 05:59:43 pm

Kindly let me know the Code to be filed while depositing the demand under section 234E......

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SANISH

1/22/2014 11:29:53 pm

THE CODES ARE WRITTEN BEHIND THE CHALLAN 281....

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Pradeep

2/20/2015 04:16:39 pm

CODE FOR DEPOSITING THE DEMAND UNDER SECTION 234e IS NOT MENTIONED EVEN IN OVERLEAF OF FORM. CAN ANY BODY INFORM ME THE CODE.

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rameh gawad

6/28/2016 07:51:33 am

FOR PAYMENT WHICH CODE NO MENTION ON TDS PENALTY & LATE TDS RETURN FILLING IN FORM NO 281 THIS IS BECAUSE SO MANY CODE USE IN ONE QUARTER WHILE FILLLING THE RETURN